Disney considers launching free streaming option for consumers | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Disney is quietly considering offering a new free streaming option in response to shifting consumer behavior.

The company, which owns streaming services Disney+, Hulu, and ESPN, recently saw revenue increase across all three platforms after raising subscription prices in October. In the first quarter of 2026, Disney’s SVOD (subscription video on demand) revenue rose by 11% year over year, according to its latest earnings report.

Amid revenue growth, Disney has been working to reduce churn in recent months after Disney+ and Hulu saw churn rates spike to 7.8% and 9.6%, respectively, in September last year during the Jimmy Kimmel controversy, according to recent data from Antenna. However, those rates declined to 4.1% and 4.9% by December.

During an earnings call in May, Josh D’Amaro said that the company is “highly focused on churn” in its streaming business and that Disney+ is critical to achieving this initiative.

“All of the opportunities that we have to drive value at this company, reducing churn, Disney+ might be the single most significant opportunity that we have,” said D’Amaro. “And so it’s probably not surprising on pushing the entire organization to prioritize against that goal.”

Disney weighs a free Disney+ streaming option

One opportunity the company is reportedly exploring is offering a free version of Disney+ to consumers, according to a recent Business Insider report.

Disney is considering allowing some of its Disney+ streaming content on this free version, a move that would be part of an ongoing discussion to better serve consumers.

Adam Smith, a chief product and technology officer at Disney, discussed this potential free Disney+ option during a company streaming town hall on July 9. He didn’t provide a potential timeline for this free tier or any other additional information.

The move from Disney comes after it faced backlash from subscribers last year for increasing several Disney+ plans by at least $2 in October. Some even threatened to cancel their subscription due to the higher prices.

At the time, Disney+ Basic (with ads) increased from $9.99 to $11.99, while Disney+ Premium climbed from $15.99 to $18.99, and the Disney+/Hulu Bundle rose from $10.99 to $12.99.

The price increases came after Disney+ plans went up by $2 in October 2024.

Disney is contemplating offering a free tier of Disney+ to consumers.

Marvin Samuel Tolentino Pineda / Getty Images

Disney is responding to the growing shift toward free streaming

Many consumers nationwide have grown tired of streaming price hikes and are becoming more comfortable with pulling the plug on their subscriptions.

A survey from Reviews.org in June found that 52% of U.S. consumers have canceled or downgraded their streaming plans because of a price increase, and 43% are likely to cancel at least one streaming service in the next three months.

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Also, 55% said they would use a free streaming platform because they can no longer have a reason to pay for another streaming subscription.

The top three free streaming services that consumers in the survey said they use are Tubi, The Roku Channel, and Pluto TV. These free streaming platforms primarily generate revenue by running video ads during movies and TV shows.

In a separate Reviews.org report, Trevor Wheelwright, a TV, streaming, and internet expert, said survey data reveal that “cost plays a huge role in which streaming services consumers decide to keep — or kick.”

“Free streaming services are becoming a practical part of how many Americans watch TV, whether it’s catching videos and concerts on YouTube or discovering shows on Free, Ad-Supported Television (FAST),” said Wheelwright.

“Not everything on streaming needs to be the latest rentals or releases — turning to lower-cost platforms allows consumers to maximize their day-to-day entertainment without maxing out their budget,” he added.

Amid this shift in consumer behavior, Fox Corporation CEO Lachlan Murdoch revealed during an earnings call in May that Tubi, which Fox owns, has “nearly 100 million monthly active users.” The platform’s revenue increased by 23% year over year in the first few months of this year, he added.

“Engagement was also solid with a 19% increase in total view time, maintaining strong momentum from library content, Tubi originals and creator-led titles,” said Murdoch.

Paramount, which owns Pluto TV, is also seeing monthly active users and engagement grow on the platform.

“I am a big believer in the FAST space,” said Paramount CEO David Ellison during an earnings call in February. “And I think when you really look at globally, FAST is something that is only going to grow in importance, and when you look at the signs that are also really encouraging on Pluto, we are seeing engagement grow.”

Jon Giegengack, a principal at Hub Entertainment Research, said in a TV Tech report in May that free streaming services will continue growing in popularity, and that’s not only because they are free.

“‘Free’ is a reason for people to try a service, but it’s not enough to create real engagement over the long term,” said Giegengack.

“However, this research shows the library content most FASTs are built around is actually a selling point for many users, as is the low-friction user experience of services that often don’t even require you to create an account,” he added. “As the cost of streaming — and everything else — keeps rising, free streaming will keep gaining ground.”